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TMI Blog2024 (8) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... passed order which was not in conformity with some other orders passed by the High Court, it was not available for the LAO to ignore or flout the Court s orders, which are to be presumed to be correct till they are set aside in appeal. Thus, no fault can be attributed on the LAO or on his officials. In the absence of there being any fault and there being a genuine belief based on judgment of the High Court that TDS was not required to be deducted on the interest paid, the action of the LAO cannot be said to be wrongful or illegal. The action of releasing the interest amount without deducting TDS therefore, cannot be a reason for imposing penalty in terms of Section 201 and 201 (1A) of the Act, 1961 and cannot be justified. The Land Acquisit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agricultural land is exempted from deduction of tax at source in terms of Section 194LA of the Act, 1961. Till 2012, the petitioner was disbursing the enhanced compensation and interest on enhanced compensation by deducting tax at source in terms of Section 194A of the Act, 1961. 3. In the case of CIT vs. Ghanshyam (HUF) 315 ITR 1 , the Supreme Court while interpreting the provisions of Section 45 (5) (b) of Act, 1961 held that the interest on enhanced compensation paid under Section 28 of Act, 1894 is part of the compensation and therefore, not liable for deduction of tax at source as the same would be held to be an accretion to capital. The High Court also passed orders in the case of Jagmal Singh and another vs. State of Haryana and anot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed As per opinion of ADA (P), therefore, TDS may not be deducted . This view of DRO was based on ADS (P) opinion as well as various court decisions on section 28 of the Land Acquisition Act, 1894 wherein it has been held in one of the cases CIT Vs Ghanshyam (HUF) that interest u/s 28 of the Land Acquisition Act, 1894, unlike interest u/s 34 is an accretion to the value, hence, it is a part of enhanced compensation or consideration. Copy of order is given to you. Further, in the case of Sh. Satpal others Vs. St. of Haryana, ADJ, Faridabad, has held that Joint Defendant (JDA) have illegally deducted Income Tax (TDS) out of compensation amount and JD's (LAO) are directed to pay the same to the landowner i.e. refund the TDS vide order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment/Assistant Commissioner of Income Tax, TDS Circle has vehemently argued, and has also submitted written arguments in support of the order impugned. It is stated that the LAO working on behalf of HUDA (Haryana Urban Development Authority) was debarred from withholding tax from all the assesses whose land was compulsorily acquired. It is further submitted that the HUDA was required to contact the Income Tax department as amendments were made in the Act in 2002. 9. Learned counsel for the Revenue also submits that the Income Tax Department was not a party to the case of Jagmal Singh and another vs. State of Haryana and another in CR No. 7740 of 2012 in the High Court, wherein the interim order was passed. It was further argued that re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Singh and another vs. State of Haryana and another in CR No. 7740 of 2012, Satbir Singh vs. State of Haryana and another in CR No. 7736 of 2012 were allowed and the order was recalled holding that interest on additional award is taxable and income tax is liable to be deducted at the time of deposit. The order has been passed in review applications on 02.02.2016 and therefore, the petitioner was liable to pay interest under section 201 (1A) of the Act. 14. Learned counsel for the Revenue relies upon earlier judgment of Bikram Singh and others vs. Land Acquisition Collector and others, 1997 (10) SCC 243, CIT vs. Bir Singh (supra), Manjet Singh (HUF) Karta Manjeet Singh (supra), and prays for dismissal of the writ petition. 15. Actus Curiae Ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders of restraining from deduction of TDS. Thus, it is apparent that the TDS deductions were not made based on orders of the Court. It is also noticed that orders passed by the High Court were later on reviewed at the instance of the Income Tax Department. 19. Learned counsel for the Revenue has attempted to submit that there were other judgments of the High Court wherein a different view had been taken holding that TDS can be deducted (as referred supra). However, she does not deny that the LAO and his department had at the time of enquiry submitted the reasons for non-deduction of TDS as noticed by this Court hereinabove. Therefore, it cannot be said that the LAO was at fault. He was genuinely following the advice given to him by his s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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